With Keystone delayed, oil by rail in DC spotlight

As the decision to approve the Keystone XL pipeline gets pushed further and further out, attention in Washington has been trained on the alternative: delivering oil by rail.

The National Transportation Safety Board on Wednesday is holding its second day of its Rail Safety Forum, where regulators and the industry are discussing everything from tank-car design to emergency response planning.

Delivery of oil by train has rocketed as the Keystone XL pipeline has been delayed for four years. It’s important to note that’s far from the only reason the transportation method for oil has boomed, as it also coincides with a boom in production here in the U.S., notably from the Bakken Formation in North Dakota.

According to data from the Association of American Railroads, U.S. carloads of petroleum products have more than doubled since April 2010, the first time the State Department delayed Keystone approval.

There are advantages to carrying oil and other petroleum by rail — that method allows connections to any destination with railways, as opposed to the fixed points available on pipelines.

But it’s not come without risks, as demonstrated in a 2013 derailment in Quebec and a 2009 derailment in Cherry Valley, Illinois. The inferno following the Quebec derailment of Bakken crude killed 47 people.

“Millions of dollars are invested to seek out new oil reserves,” said Deborah Hersman, the head of the agency, on Tuesday. “A commensurate investment must be made to ensure safe transportation of these goods.”

The railroads are at odds with the tank-car makers and the energy industry — the railroads want thicker tanker walls, which would reduce storage space. There’s also concern from the industry about the ability to carry out retrofits.

Meanwhile, it’s not up to the NTSB to set rules for tank cars. The Pipeline and Hazardous Materials Safety Administration as well as the Federal Railroad Administration have that responsibility and are developing a proposal on design standards for the DOT-111. Panelists from both agencies are due to speak Wednesday.